The Southern Company (SO) Stock

The Southern Company trades at a P/E ratio of 24.68, which is near the market average of approximately 20, suggesting the market views it as fairly valued relative to its earnings. Looking ahead, the forward P/E of 20.53 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 4.28 indicates a premium valuation even accounting for growth.

With a beta of 0.39, The Southern Company is less volatile than the overall market. This means when the market moves up or down by 10%, this stock typically moves less than 10% in the same direction. Lower beta stocks are often preferred by conservative investors seeking stability. The price-to-book ratio of 3.06 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

The Southern Company achieves a profit margin of 15.10%, meaning it retains $15.10 from every $100 in revenue after all expenses. This is an impressive margin, indicating strong pricing power and efficient cost management that allows the company to generate substantial profits. The operating margin of 28.10% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 11.20% and ROA at 3.39%, the company achieves moderate returns on invested capital.

The Southern Company's revenue grew by 7.90% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings decreased by 27.50% year-over-year, reflecting the bottom-line impact of business performance. These growth metrics should be evaluated against UTILITIES - REGULATED ELECTRIC industry averages for proper context.

The Southern Company offers a dividend yield of 3.09%, paying $2.90 per share annually. This above-average yield of 2-4% provides meaningful income while still allowing the company to reinvest for growth. It compares favorably to the S&P 500 average and offers competitive returns versus bonds in the current rate environment. To receive the next dividend, shares must be purchased before the ex-dividend date of Aug 18, 2025.

The dividend sustainability can be assessed through the payout ratio - The Southern Company pays $2.90 per share in dividends against earnings of $3.84 per share, resulting in a payout ratio of 75.52%. This high payout ratio of 60-90% leaves limited earnings for reinvestment. While currently sustainable, there's less buffer for dividend growth or protection during earnings downturns. The next dividend payment is scheduled for Sep 8, 2025.

The Southern Company has a market capitalization of $104.9B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 1.10B shares outstanding, the company's ownership is widely distributed. As a major player in the UTILITIES - REGULATED ELECTRIC industry, it competes with other firms in this sector.

The Southern Company's book value per share is $30.92, while the current stock price is $94.03, resulting in a price-to-book (P/B) ratio of 3.04. This high P/B ratio indicates significant intangible assets, strong brand value, or high growth expectations. Technology and consumer brand companies often trade at elevated P/B ratios due to intellectual property and competitive advantages not reflected on the balance sheet. As a common stock, this represents equity ownership with voting rights.

19 analysts cover SO with 47% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The mixed views reflect uncertainty about the outlook. The consensus target of $96.78 implies 2.9% upside, but targets are often adjusted to follow price moves rather than predict them.

Current analyst recommendations:2 Strong Buy, 7 Buy, 8 Hold, 2 Sell, 0The neutral stance suggests uncertainty or fair valuation at current levels.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.